Time Warner Is Planning a Move to Hudson Yards

Time Warner Inc. announced on Thursday that it plans to move its headquarters from Columbus Circle to a new, 80-story skyscraper on the Far West Side of Manhattan, ensuring the development of a vast neighborhood made up of office towers, residential buildings, a shopping mall and a park, all built over a 13-acre railyard.

At the same time, Time Warner announced it was selling its existing headquarters, about 1.1 million square feet, in what is known as the Time Warner Center, for $1.3 billion to a partnership of two sovereign wealth funds and the Related Companies.

Time Warner would take about 5,000 employees to a once industrial neighborhood on the West Side, immediately establishing a new business and residential district, much the way it did when the media company moved to Columbus Circle a decade ago.

Time Warner anticipates that in late 2018 it will consolidate its executive offices and its HBO, Turner Broadcasting and Warner Bros. divisions in the base of a newly opened, 1,227-foot-tall tower at the southwest corner of 10th Avenue and 33rd Street.

Until then, the company will remain at Time Warner Center, a two-towered complex built by the Related Companies, the same developer behind the Hudson Yards project.

“The sale of our office space in Time Warner Center to Related Companies and its partners,” Jeffrey L. Bewkes, the chairman of Time Warner, said, “is an important step toward moving our New York City-based employees into a dynamic new complex that will foster even more collaboration, creativity and efficiency across our businesses.”

Time Warner’s decision to move to a new home is something of a vindication for Stephen M. Ross, the chairman of the Related Companies, and his partner, who have made an enormous real estate bet on the West Side, where brick warehouses, factories, shops and tenements once sat near the Hudson River docks.

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Time Warner will move into a new, 80-story tower at 10th Avenue and 33rd Street in Manhattan. The new location and the existing one were developed by the Related Companies.CreditThe Related Companies

“The world’s changing; New York’s changing,” Mr. Ross said on Thursday evening. “You’ve got to stay ahead of the curve. I really believe it’s going to be the new heart of the city. Time Warner made a smart move, capturing the value at Columbus Circle and embracing the new technology and efficiency at Hudson Yards.”

In 2008, just before the economy collapsed, Related signed a $1 billion deal to buy the development rights over the railyards that stretch from 30th to 33rd Street, between 10th and 12th Avenues.

One of former Mayor Michael R. Bloomberg’s signature initiatives was rezoning the neighborhood for high-rise development, which he said was needed for the city to grow and prosper. The $15 billion proposal by Related, and its partner, Oxford Properties, for the railyards constituted one of the largest private real estate projects in the country.

Related has continued to buy land in the neighborhood, beyond the railyards. It is completing a 32-story, 390-unit apartment tower at the southwest corner of 30th Street and 10th Avenue and has assembled at least five other major development sites nearby.

“Related believes that the future of New York is on the West Side,” said Elliott Sclar, a professor of urban planning and economics at Columbia University. “And there’s an enormous number of foreign investors pouring money into New York real estate, expecting a safe return. I just wonder how far ahead of demand are they running?”

Mr. Ross believes that the Time Warner Center — a 2.8-million-square-foot complex that includes office space, condominiums, a Mandarin Oriental hotel, upscale shopping, a floor of expensive restaurants and Jazz at Lincoln Center — transformed Columbus Circle, the once dowdy traffic circle at the southwest corner of Central Park, into a luxury commercial and residential neighborhood.

As developers moved into the neighborhood, profiting from the changes that Related wrought with the center, Mr. Ross regretted not buying other parcels in the area.

“We built Time Warner Center and didn’t invest in the neighborhood,” a Related executive said. “We’re not going to make the same mistake at Hudson Yards.”

But it has not been easy to lure prime office tenants to the West Side in a market in which corporations are increasingly cost-conscious and risk-averse. Hudson Yards is also competing for office tenants with new skyscrapers in Lower Manhattan.

The eastern railyard project requires the construction of a $750 million platform over the railyards on which most of the new buildings would sit. The western yard, between 11th and 12th Avenues, is mostly residential and will start in the coming years.

Mr. Ross and Related adopted a strategy to lease or sell the office space at cost, figuring the profits would come from the residential component and one million square feet of retail shops and restaurants.

In the spring, Related finally signed a deal with Coach, the luxury retailer, to be the anchor tenant for the first office tower, a 52-story building at the northwest corner of 30th Street and 10th Avenue. L’Oréal USA, the beauty products company, and SAP, a software company, have since joined Coach in the building now under construction.

Under the deal with Time Warner, the media company would be the anchor for a second, even larger tower. After the final contracts are signed, it will own almost 40 percent of the 2.6 million-square-foot tower.

Related said it expected to begin construction of the platform for the eastern yard in the coming weeks, opening the way for the second office tower, the shopping mall, two residential buildings, a park and a cultural center.

Time Warner used Eastdil Secured, a real estate company, to sell the building and hired Studley, a broker, to represent the company in the negotiations for the new space. Related’s partners in buying the Time Warner space at Columbus Circle are the Abu Dhabi Investment Authority and the Government of Singapore Investment Corporation.

Mr. Bewkes is hoping to bring the company’s far-flung New York operations under one roof. It will be a slimmer version of the once giant media company, having spun off Warner Music, AOL and Time Warner Cable. The company is in the process of doing the same with Time Inc. and its roster of magazines, including Sports Illustrated, People and Time.

Correction:

An article on Friday about plans by Time Warner Inc. to move its headquarters to the Far West Side misstated, in some editions, the middle initial of the chairman of the Related Companies, which developed the sites of both the old and new headquarters of Time Warner. He is Stephen M. Ross, not Stephen J. The article also misstated, in some editions, the number of stories of an office tower on the Far West Side where Related signed a deal with Coach to be the anchor tenant. It will have 52 stories, not 47.

A version of this article appears in print on , on Page A19 of the New York edition with the headline: Time Warner Is Planning a Move to Hudson Yards. Order Reprints | Today’s Paper | Subscribe

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